How to Get Rich

Hey, this is Nivi. You're listening to the Navall podcast. This is one giant mega sowed that collects every episode we've done on getting rich, all of it based on his tweet storm of how to get rich without getting lucky. I've collected them all here because we’re going to switch topics to the new topic of happiness on the next episode.

We've published one of these giant mega sowed before, but this one's even bigger. It's about three and a half hours long. It covers all the tweets from the "How to Get Rich" tweet storm, plus all the Q&A that we did after that, plus ten minutes of bonus material at the very end that we've never released. The overall sound quality of this mega sowed improves a lot after the first hour. You can find a link to a clean transcript in the show notes, or if you go to the website nav al, there’s no calm at the end.

I hope you enjoy. You probably know Navall from his Twitter account, and we're going to be talking about his epic tweet storm on how to get rich without getting lucky. We're going to go through most of the tweets in detail, giving Navall a chance to expand on them and just generally riff on the topic. He'll probably throw in some ideas that he hasn't even published before.

He's also the co-founder of AngelList and opinions. He’s a prolific tech investor in companies like Twitter, Uber, and many more. And I’m the co-founder evangelist Navall, and I also co-authored the Venture Hacks blog with him back in the day.

Yeah, Navall's "How to Get Rich" tweet storm definitely hit a nerve. A lot of people say it was helpful, reaching across aisles and people outside of the tech industry, people in all walks of life. People do want to know how to solve their money problems, and everyone vaguely knows that they want to be wealthy but don’t have a good set of principles to do it by.

What's the difference between wealth, money, and status? Wealth is the thing that you really want. Wealth is assets that earn while you sleep. Wealth is the factory with the robots that are cranking out things. Wealth is the computer program that’s running at night that’s serving other customers. Wealth is even money in the bank that is being reinvested into other assets and into other businesses. Even a house can be a form of wealth because you can rent it out, although it’s probably a lower use of productivity than land and actually doing some commercial enterprise.

So my definition of wealth is much more businesses and assets that can earn while you sleep. But really, the reason you want wealth is because it buys you freedom. So you don’t have to wear a tire like a collar around your neck. So you don’t have to wake up at 7 a.m. and rush to work and sit in commute traffic. So you don’t have to waste away your entire life grinding all the productive hours into a way into a soulless job that doesn’t fulfill you. The purpose of wealth is freedom. It’s nothing more than that.

It's like buying fur coats or driving Ferraris or sailing yachts or jetting around the world in your Gulfstream. That stuff gets really boring and really stupid really fast. It’s really just so that you are your own sovereign individual. You're not going to get that unless you really want it. The entire world wants it, and the entire world is working hard at it. To some extent, it is competitive. It's a positive-sum game, but there are competitive elements to it because there’s a finite amount of resources right now in society, and to get the resources to do what you want, you have to stand out.

Money is how we transfer wealth. Money is social credits. It is the ability to have credits and debits on other people's time. If I do my job right, if I create value for society, society says, "Oh, thank you! We owe you something in the future for the work that you did in the past. Here’s a little IOU; let’s call that money." That money gets debased because people steal the IOUs. The government prints extra IOUs. People wreck under IOUs, but really what money is trying to be is trying to be a reliable IOU from society that you are owed something for something you or someone who gave you that money did in the past.

We can transfer these IOUs around, so really money is how we transfer wealth. There are fundamentally two huge games in life that people play. One is the money game because money’s not gonna solve all your problems, but it’s gonna solve all your money problems. I think that people know that—they realize that, so they want to make money. But at the same time, many of them deep down believe that they can't make it. They don’t want any wealth creation to happen.

They virtue signal by attacking the whole enterprise, by saying, "Well, making money is evil," but what they’re trying to do is they’re actually playing the other game—the status game. They’re trying to be high status in the eyes of other people watching by saying, "Oh, I don’t need money; we don’t want money."

Status is just your ranking in the social hierarchy. Wealth is not a zero-sum game. Everybody in the world can have a house because you have a house doesn't take away from my ability to have a house. If anything, the more houses that are built, the easier it becomes to build houses. The more we know about building houses, the more people that can have houses.

So wealth is a very positive sum game. We create things together. We're starting this endeavor to create this hopefully piece of art that explains what we’re doing at the end of it. Something brand-new will be created. It’s a positive sum game. Status, on the other hand, is a zero-sum game. It's a very old game we’ve been playing since monkey tribes, and it’s hierarchical: who’s number one, who’s number two, who’s number three?

For a number three to move to number two, number two has to move out of that slot. Status is a zero-sum game. Politics is an example of a status game. Even sports is an example of a status game. To be the winner, there must be a loser. I don’t fundamentally love status games; they play an important role in our society, so we figure out who’s in charge, but fundamentally, you play them because they’re a necessary evil.

The problem is an evolutionary basis. If you go back thousands of years, status is a much better predictor of survival than wealth. You couldn’t have wealth before the farming age. Before farms, you couldn’t store things; hunter-gatherers carried everything on their backs. So hunter-gatherers lived entirely in status-based societies. Farmers started going to wealth-based societies, and the modern industrial economies are much more heavily wealth-based societies.

But there’s always a subtle competition going on between status and wealth. For example, when journalists attack rich people or they attack the technology industry, they’re really bidding for status. They’re saying, "No, the people are more important," and "I, the journalist, represent the people,” and therefore, “I am more important." The problem is that by playing these status games, to win at a status game, you have to put somebody else down.

That’s why you should avoid status games in your life because they make you into an angry, combative person. You’re always fighting to put other people down to put yourself and the people that you like up. And they’re always going to exist; no way around it. But just realize that most of the times when you’re trying to create wealth, you’re actually getting attacked by someone else, and they’re trying to look like a goody two-shoes. But really what they’re doing is they’re trying to up their own status at your expense.

They’re just playing a different game, and it’s a worse game—it’s a zero-sum game instead of a positive-sum game. One thing you mentioned before the interview that stuck with me was the idea that you think everyone can become rich, and that perhaps some of the ways of getting rich or the idea of wealth is vilified by some people in other countries.

Say you want to expand on that a little bit. Yeah, I think there’s this notion that making money is evil, right? It’s rooted all the way back down to “money is the root of all evil.” People think that bankers steal our money, and you know it’s somewhat true in that—in a lot of the world, there’s a lot of theft going on all the time. The history of the world in some sense is this predator-prey relationship between makers and takers.

There are people who go out and create things and build things and work hard on things, and then there are people who come along and play with a sword or a gun or taxes or crony capitalism or communism or what-have-you. There are all these different methods to steal. Even in nature, there are more parasites than there are non-parasitical organisms. You have a ton of parasites in you who are living off of you, and the better ones are symbiotic—they’re giving something back—but there are a lot that are just taking. That’s just the nature of how any complex system is built.

But what I am focused on is true wealth creation. It’s not about taking money; it’s about creating abundance. Obviously, there’s not a finite number of jobs or a finite amount of wealth; otherwise, we would still be sitting around in caves figuring out how to divide pieces of firewood and, you know, the occasional dead deer. So most of the wealth in civilization—in fact, not most—all of it has been created, and it got created from somewhere. It got created from people; it got created from technology.

A critical productivity got created from hard work. So this idea that it’s stolen is, I think, this horrible zero-sum game that people who are trying to gain status play. But the reality is everyone can be rich, and we can see that by seeing that in the first world. Everyone is richer than almost anyone who was alive 200 years ago. 200 years ago, nobody had any biotics. Nobody had cars. Nobody had electricity. Nobody had the iPhone.

So all of these things are inventions that have made us wealthier as a species today. I would rather be a poor person in a first-world country than be a rich person in Louis XIV France. I’d rather be a poor person today than an aristocrat back then, and that’s just because of wealth creation—the engine of technologies, science, that is applied for the purpose of creating abundance.

So I think fundamentally everybody can be wealthy. And the thought experiment I want you to think through is imagine if everybody had the knowledge of a good software engineer and a good hardware engineer—if you could go out there and you could build robots and computers and bridges and program them. Let’s say every human knew how to do that. What do you think society would look like in 20 years?

My guess is what would happen is we would build robots, machines, software, and hardware to do everything, and we would all be living in massive abundance. We would essentially be retired in the sense that none of us would have to work for any of the basics. We’d even have robotic nurses. We’d have machine-driven hospitals. We’d have self-driving cars. We’d have farms that are 100% automated.

We’d have clean energy. So at that point, we could use technology breakthroughs to get everything that we wanted. And if anyone is still working at that point, they’re working as a form of expressing their creativity; they’re working because it’s in them to contribute and to build and design things. But I don’t think capitalism is evil. Capitalism is actually good. It’s just that it gets hijacked.

It gets hijacked by improper pricing of externalities. It gets hijacked by improper deals where that you have corruption or you have monopolies over it. Capitalism is intrinsic to the human species; capitalism is not something we invented. Capitalism is not even something we discovered; it is innate to us. In every exchange that we have, when you and I exchange information, I want some information back from you. I give you information; you give me information.

If we weren’t having a good information exchange, you’d go talk to somebody else. So the notion of exchange and keeping track of debits and credits, this is built into us as flexible social animals. We are the only animal in the animal kingdom that cooperates across genetic boundaries. Most animals don't cooperate, but when they do, they cooperate only in packs where they co-evolved together and they share blood so they have some shared interests. Humans don’t have that, and what lets us cooperate is because we can keep track of debits and credits—who put in how much work, who contributed how much. That’s all free-market capitalism.

So I strongly believe that it is innate to the human species, and we are going to create more and more wealth and abundance for everybody. Everybody can be wealthy, everybody can be retired, everybody can be successful. It is merely a question of education and desire. You have to want it. If you don’t want it, that’s fine; then you opt out of the game. But don’t try and put down the people who are